A focused group headed by a technology leader (a CTO, possibly hired from outside the industry) and populated with representatives from across departments can improve work-stream delivery, facilitate personnel buy-in and ultimately enhance value.
In addition to the CTO, another critical position in the transformation office is the company CFO, the keeper of the keys to the company coffers. Companies need a truly forward-thinking change agent who can do more than improve the status quo. The right CFO will help drive this agenda in a way that is highly effective.
The foundations of an effective transformation management office include strategic alignment, integration and innovation, governance and decision-making, value extraction, organizational change management, project and program management, and collaboration.
As the transformation management office begins to build out its technology strategy by implementing new tools, specific considerations must be taken into account to ensure successful deployment:
- Start transformation management at project kick-off. It is unwise to wait until go-live. Transformation management is a process in itself, requiring significant time and attention. For example, communication activities should begin before project kick-off and should continue throughout deployment.
- New systems will not fix old problems. While a new tool or system could be part of the plans to address poor performance (alongside other tactics like better training and improved processes), a new software system by itself will not fix any real business problems.
“Decision makers are drowning in a hail of silver bullets. This is driving some scepticism,” said an Australian technology provider
- Consider the control environment. Controls are one of the most effective ways to convince senior management of the need to adopt technology. This is particularly true in situations where technology will automate processes and in so doing diminish the human error that could ultimately result in a breach.
But those same controls are also a critical barrier to overcome when plugging into any new application. Do third parties charged with providing new technology and helping integration truly understand the parameters in which a public or private real estate company must operate? Will they adapt their integration processes to meet specific regulatory requirements? The intersection of highly creative technology people and inflexible industry rules and regulations can be a major headache.
- Assess the impact of automated controls early in the process. The inclusion of automated controls in new technology implementation needs to be considered at the design stage of the implementation, when the company is developing its business requirements. These considerations are difficult to implement after go-live.
- Go beyond the conference room to assess need. Gathering business requirements in a conference room almost guarantees key data and use cases will get lost. Recognizing that at least a portion of requirements-gathering is “situational” provides an extra level of validity to the findings.
- Keep decision-making on track. Most steering committee and task force members have day jobs in addition to their technology-transformation roles. This creates competing priorities. This frequently means that questions and decision points don’t get answered in a timely manner or are not given the appropriate amount of thought. Slow or incomplete decisions can lead to a longer project, frequent reworking and more confusion, all of which could carry additional costs.
- Migrate data with confidence. Nothing destroys perceptions about a newly deployed system or tool faster than bad data. Many companies push data migration testing to the very end, which means it doesn’t get tested as thoroughly as it should.
- Always perform User Acceptance Testing (UAT) with actual business users. Many organizations limit UAT to having system administrators log in and probe through a few key use cases. We strongly recommend a thorough UAT as part of each sprint toward go-live. Furthermore, the actual system users must participate in the UAT testing. To the extent possible, the UAT testing should use realistic data.
- Mobilize and prioritize a top-tier hypercare process. This is critical to supporting your go-live. Any major system issues (whether stemming from technology, process or people) are likely to surface within the first month after launch, if they surface at all. For that reason, plan to include a high-touch hypercare period.
- Crawl, walk, run, fly. Get the basics right first and build from there. Technology adoption will most likely be an ongoing program, not a finite project.
- Analyze old processes for a new day. Do not drop your existing processes into the new system. Rather, carefully analyze how you conduct business to leverage what your new system enables. Take the opportunity to reassess and potentially redefine processes.
“Technology adoption is often about refining the process vs. introducing a new tool,” said a Canadian pension fund.
Talent creation and management
If people are not the most significant impediment to more rapid adoption of technology, they are certainly in the top tier.
“It's people, not technology, that limits the growth of proptech ideas,” said a Hong Kong fund manager.
There is no doubt that when it comes to technology in the real estate sector, talent is an issue. Technology and real estate companies alike recognize it, and 53% of real estate owners say they don’t have the in-house talent to adopt technology successfully.
But it is not just about talent. Thirty-eight percent of companies suggest their existing culture is not open to this type of change. The industry is still over-reliant on what has proved reliable in years past and thus, in many cases, it is resistant to change. This resistance can take many forms.
For many senior leaders, the issue is less about potential benefits and more about the cost to replace older but still working systems. They tend to find it hard to justify scrapping systems that have been working for years or even decades. They also tend to hesitate going much farther out on the risk scale than their competitive peers. Breaking that ingrained mentality will continue to be a challenge.